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Verisk Analytics Inc (NAS:VRSK)
Beneish M-Score
-2.74 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Verisk Analytics Inc has a M-score of -2.74 suggests that the company is not a manipulator.

VRSK' s 10-Year Beneish M-Score Range
Min: -2.93   Max: -2.34
Current: -2.74

-2.93
-2.34

During the past 7 years, the highest Beneish M-Score of Verisk Analytics Inc was -2.34. The lowest was -2.93. And the median was -2.71.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Verisk Analytics Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8654+0.528 * 1.0395+0.404 * 0.8797+0.892 * 1.1025+0.115 * 1.1965
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9273+4.679 * -0.0598-0.327 * 0.8588
=-2.74

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $178 Mil.
Revenue was 423.554 + 409.643 + 332.463 + 438.597 = $1,604 Mil.
Gross Profit was 251.084 + 239.97 + 225.632 + 262.017 = $979 Mil.
Total Current Assets was $705 Mil.
Total Assets was $2,675 Mil.
Property, Plant and Equipment(Net PPE) was $273 Mil.
Depreciation, Depletion and Amortization(DDA) was $138 Mil.
Selling, General & Admin. Expense(SGA) was $223 Mil.
Total Current Liabilities was $609 Mil.
Long-Term Debt was $1,136 Mil.
Net Income was 88.099 + 115.558 + 87.223 + 96.441 = $387 Mil.
Non Operating Income was 0.126 + 0.009 + 0.007 + 0.001 = $0 Mil.
Cash Flow from Operations was 54.007 + 232.828 + 120.468 + 139.761 = $547 Mil.
Accounts Receivable was $187 Mil.
Revenue was 390.356 + 376.697 + 289.258 + 398.863 = $1,455 Mil.
Gross Profit was 237.927 + 233.065 + 209.703 + 242.114 = $923 Mil.
Total Current Assets was $494 Mil.
Total Assets was $2,439 Mil.
Property, Plant and Equipment(Net PPE) was $186 Mil.
Depreciation, Depletion and Amortization(DDA) was $125 Mil.
Selling, General & Admin. Expense(SGA) was $218 Mil.
Total Current Liabilities was $585 Mil.
Long-Term Debt was $1,267 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(177.973 / 1604.257) / (186.549 / 1455.174)
=0.11093796 / 0.12819704
=0.8654

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(239.97 / 1455.174) / (251.084 / 1604.257)
=0.63415715 / 0.61006622
=1.0395

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (704.563 + 272.875) / 2675.277) / (1 - (493.609 + 185.928) / 2439.351)
=0.63464045 / 0.72142713
=0.8797

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1604.257 / 1455.174
=1.1025

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(125.119 / (125.119 + 185.928)) / (138.193 / (138.193 + 272.875))
=0.40225111 / 0.33618039
=1.1965

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(223.01 / 1604.257) / (218.136 / 1455.174)
=0.13901139 / 0.14990372
=0.9273

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((1135.645 + 608.743) / 2675.277) / ((1266.91 + 585.136) / 2439.351)
=0.65204014 / 0.75923719
=0.8588

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(387.321 - 0.143 - 547.064) / 2675.277
=-0.0598

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Verisk Analytics Inc has a M-score of -2.74 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Verisk Analytics Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97181.1730.784
GMI 0.98930.94671.0379
AQI 0.86561.22460.9324
SGI 1.171.05711.1334
DEPI 1.06230.98411.103
SGAI 1.07610.99390.918
LVGI 1.020.83370.8667
TATA -0.0608-0.0588-0.0633
M-score -2.71-2.43-2.79

Verisk Analytics Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.02151.0310.99491.1730.93191.04220.940.81330.83160.8654
GMI 0.99130.99150.98760.94670.95130.9530.96281.01561.03081.0395
AQI 1.04830.99951.0791.22461.00261.01130.92270.93240.90670.8797
SGI 1.1621.15631.15451.05711.05311.0311.01681.09251.09251.1025
DEPI 1.06241.04621.04830.98410.9450.96351.05131.1031.16341.1965
SGAI 1.03480.99760.97820.99390.9860.95840.94360.92880.92240.9273
LVGI 0.950.92690.8680.83370.86470.84430.83140.86670.88840.8588
TATA -0.0681-0.0417-0.0268-0.0588-0.0533-0.0741-0.0717-0.0633-0.0626-0.0598
M-score -2.60-2.48-2.39-2.43-2.73-2.73-2.84-2.82-2.80-2.74
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